Asian markets made a cautious start on Wednesday as rising bond yields and oil prices kept investors on edge ahead of the US Federal Reserve’s policy decision later in the day.
MSCI’s broadest index of Asia-Pacific shares outside Japan fluctuated between gains and losses before trading 0.2% higher, led by a 0.8% rise in Korean shares. S&P 500 e-mini futures edged up 0.1%.
The cautious mood followed another weak session on Wall Street, where the S&P 500 fell 0.5% for its second straight decline as the yield on the 10-year US Treasury bond climbed above 5% for the first time in three years.
“U.S. equity markets closed lower overnight as rising Treasury yields, another jump in crude and the polarised debate around pacing AI development left the market in a cautious mood,” said Tony Sycamore, market analyst at IG in Sydney.
The 10-year Treasury yield was 0.8 basis point lower at 4.9875% in Asian trading after breaching the 5% mark on Tuesday.
Markets are pricing in a 92.4% probability of a 25 basis point Fed rate hike, according to CME Group’s FedWatch tool, up from 59.4% a week ago.
The US dollar index was near a two-week high at 99.656, while oil prices eased after surging on Tuesday.
Brent crude futures fell 0.6% to US$108.08 a barrel after rising 2.9% in the previous session following reports that crude loadings at Saudi Arabia’s Red Sea export hub of Yanbu had been suspended and some cargo deliveries to European customers cancelled.
Meanwhile, bitcoin slipped 0.1% to US$75,816.24 and ether fell 0.2% to US$2,403.27 after the US Senate voted against advancing comprehensive cryptocurrency legislation backed by President Donald Trump.
Reuters
